Popular commercial units in Singapore are shops and spaces that are close to the heartlands and the Central Business District. That’s because the units tend to have a direct footfall of customers in the area.
That naturally means that such commercial units tend to cost more but are also closer to amenities. Other than being the national public housing provider, the Housing Development Board (HDB) offers commercial units for rental, buying and selling.
The commercial unit types include shops (like supermarkets and pet stores) and offices, retail space, and facilities.
You might want to buy an HDB commercial unit instead of renting, for example, if you have an established business and are shifting your premises to one that is closer to customers. There are also various other reasons to buy a commercial unit instead of renting it.
With buying comes selling, and it’s important to understand the process of selling your HDB commercial unit in case you have to do so in future. Those who already own an HDB commercial unit may also plan to sell off their existing unit.
Buying A HDB Commercial Unit From The Open Market
Applying for the resale or transfer of the sold HDB shop is done via GoBusiness Licensing. You will have to check and ensure all supporting documents and payments are duly submitted. The processing time takes at least one month after all documents and payments are received, so do plan ahead on your business operations for that.
Firstly, you will need to be qualified for the application:
- You must be 21 years old and above at the date of application.
- If the sellers or buyers are undischarged bankrupts, there is a need to obtain consent from the Official Assignee for the resale
These are the supporting documents required:
- Photocopies of buyers’ NRIC
- Latest business registration record from the Accounting & Corporate Regulatory Authority
- Company’s resolution (For Pte. Ltd. Co.)
- Letter of Authorisation/ Power of Attorney (For Mortgagee Sale)
- Letter of Undertaking for Mortgagee Sale
- Grant of Probate/ Grant of Letters of Administration (For deceased cases)
- Undertaking for proposed trade as stated in Clause 14 of the terms and conditions
- Unless the proposed trade is already operating in the premises, it must start within two months from the date of the resale/ transfer completion. If the proposed trade cannot be confirmed or is subject to tenancy, an undertaking signed by all the transferees must be submitted. The undertaking should state that the transferees will operate an approved service/ retail trade within two months of the resale/ transfer completion
The administrative fee for the application is $535. Additional fees for the transfer of an outdoor refreshment area including lodgement fees or units under the lodgement scheme will cost about $107 to up to $321. If you request an inspection, the additional fees will cost more.
When you purchase a shop, you can opt out of having an inspection of the premises during the resale or transfer application. You can choose to engage a Qualified Person or accredited checker to make sure that any alteration and additional works carried out or to be carried out on the premises meet all legal requirements. For this option, both transferors and transferees need to submit the Declaration and Undertaking form.
For works done before October 1, 2005, the shop owners can request HDB renovation records/ inspection reports. For works done after October 1, 2005, they can appoint their own Qualified Person to verify that the works meet the requirements of the Building & Construction Authority/ Fire Safety & Shelter Department.
What Is The Lodgement Scheme
Under the lodgement scheme, those who would like to sell their shops only need to lodge or file their resale details via GoBusiness Licensing with an administrative fee of $107 (inclusive of GST) from July 5, 2006.
The scheme does not apply to shops that have not been issued with leases. In this case, the owners need to sign a fresh Agreement for Lease with HDB.
There are also exceptional cases that involve a material change of use requiring HDB’s evaluation, and HDB will need to first assess if the proposed use will cause inconvenience to the surroundings. For example, family restaurants and those who would like to change their living quarters to non-residential use.
Selling An HDB Commercial Unit In The Open Market
To sell your HDB unit, you will need to check if the lodgement scheme applies to your commercial unit. If it does, you need to file your resale details online. Under the lodgement scheme, you can choose not to have an inspection of the premises during the resale/ transfer application.
Lodge or file your resale details via the online application with an administrative fee of $107 (inclusive of GST).
The lodgement scheme is not applicable for shops that have not been issued with leases – owners need to sign a fresh agreement with HDB. There can also be exceptional cases that do not qualify for the lodgement scheme, as indicated in the lodgement scheme section above.
You will also need to find out if you require an inspection report of your commercial unit, which will be similar to the inspection report process when buying an HDB commercial unit, which is to alternatively engage a Qualified Person or accredited checker, and submit the Declaration and Undertaking form.
You may not require HDB’s consent to mortgage your commercial unit if you meet the conditions listed in your lease documents.
You are free to mortgage your shop to a financial institution if you are an existing owner who purchased the premises from HDB. But do check the terms in the Agreement for Lease, Lease, Memorandum of Lease, and any other relevant documents.
You can apply for the resale or transfer of HDB sold-shop premises via GoBusiness Licensing. For units in HDB shopping and office complexes, you will need to approach the respective Managing Agents.
Featured Image Credit: Savills Singapore
Read Also: Cost Guide To Buying A Commercial Vehicle In Singapore
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